There's uncertainty surrounding the forthcoming 12th National Assembly elections, with potential money laundering concerns arising from Bangladesh during this period. The IMF, a global lender, has voiced these apprehensions. The IMF also noted that numerous traders deferred repatriating their export earnings until the election results are finalised. Their concern is rooted in the fear of smuggling export income without repatriating it to the country.

The IMF highlighted a discrepancy between the price of exported goods shipped and the export earnings received in the country in its report on Bangladesh after the November visit. The report underscores the concern that a substantial portion of this year's export income has yet to reach the country.

The report indicates that in 2023, despite significant export growth from Bangladesh, a substantial portion of export income did not reach the country. The primary reason cited is the uncertainty surrounding the upcoming parliamentary elections, leading many businessmen to halt the repatriation of export earnings until the election results are finalised.

As per the IMF, Bangladesh's imports have declined by approximately 16 per cent in the current financial year due to the foreign exchange reserve crisis and limitations on luxury goods imports. While trade growth with major partners has been sluggish, exports have shown significant strength. Bangladesh has made considerable progress in its current account as well.

However, approximately $2.1 billion, equivalent to around 10.5 per cent of the GDP, exited the country during this period. In contrast, the foreign exchange inflow during this period amounted to roughly two and a half per cent of the country's GDP.

The IMF visually compares these two figures and suggests that it signals 'capital flight' or potential money laundering. Capital flight refers to the substantial movement of money from one country to another, often prompted by unfavourable policies or conditions.

According to the International Monetary Fund’s report, Bangladesh experienced a 6.3 per cent increase in exports during the financial year 2023. However, in contrast, foreign exchange inflow into the country was considerably lower compared to the previous fiscal year of 2022. Consequently, the unrepatriated export income in 2023 surged to $9.6 billion, equivalent to over Tk 1,05,500 crore in Bangladeshi currency. This amount represents 2.1 per cent of Bangladesh's GDP in the fiscal year 2023.

This figure illustrates the scenario of delayed remittance and payment of export earnings, leading to adverse effects on short-term commercial loans. High global inflation and ongoing supply disruptions escalated the import costs for foreign-financed investment projects, consequently delaying project execution. This delay has led to reduced concessions on foreign loans for these projects. The substantial current account gap has caused Bangladesh's foreign exchange reserves to decline persistently despite the enhancement in the current account balance.

The IMF has highlighted additional potential reasons for the lack of foreign exchange inflow into the country. A footnote in the report indicates that sales within the country from Export Processing Zones (EPZs) are occasionally categorised as ‘erroneous exports’ despite not being physically exported abroad.

Moreover, product quality issues in exports and seller bankruptcies also contribute to the impact on export earnings. However, these concerns have historically been associated with indications of 'capital flight'.

Another short-term factor the IMF highlights is the uncertainty surrounding the upcoming parliamentary elections. The organisation observed that exporters have paused the repatriation of export earnings, awaiting the finalisation of election results.